BoE Keeps Rates Steady, Warns Iran War Could Trigger Hike

The Bank of England has held interest rates at 3.75% for the fifth consecutive time, but warned that it's prepared to raise them if the war in Iran continues.

A split vote on the Monetary Policy Committee (MPC) resulted in six members voting to keep the rate steady and three calling for an increase to 4%. The majority felt that holding rates at 3.75% was sufficient protection against increased global energy prices driving inflation higher later this year.

However, the committee 'recognised the potential need for additional policy restraint' should further pressures on inflation materialise, particularly in response to ongoing tensions in the Middle East.

Governor Andrew Bailey stated that if the conflict persists and second-round effects begin to emerge, interest rates will likely be tightened to counter inflationary pressures in the UK economy.